Fantastic new business model: start a company, but don’t bother producing anything. This is the Age of the Lawsuit! Acquire another company’s intellectual property and sue the pants off of anyone else using code that even faintly smells of your new patents.

In a lawsuit strikingly reminiscent to the current SCO flap, the JPEG image format is under attack by a 300-person strong scheduling software developer (not that suitability or appropriateness would ever come into play in a patent dispute).

Forgent Networks of Austin, TX announced it was suing 31 major hardware and software vendors, including the likes of Canon, Apple, Adobe and HP. Mentioned in the article but not underlined in big red letters is the fact that since they’ve started ‘licensing’ this patent in 2002, over 30 companies have deemed it enough of a threat to pony up a combined $90 million.

Of course, this isn’t the first time a popular image format has come under fire. The GIF format was built on top of a patent owned by Unisys, who promised they’d never actually take advantage of that for profit, and naturally went back on their word when it looked like they needed the money.

What does this new dispute mean for us, the users and consumers of JPEG? It’s too early to say. If the large companies named in the lawsuit pony up a settlement, what’s to stop Forgent from coming after individual users with a new-money afterglow? If the large companies named in the lawsuit fight it and win, what’s to stop Forgent from coming after individual users in embittered retaliation? There are a lot of variables here which can go in many different ways, so the only sure thing is that this is one to watch.

Update: “They can’t go after the users” seems to be a common refrain in response to this post. Time for a mini history lesson: Unisys, the former owner of the GIF patent, did in fact take steps to outline a licensing fee for individual users. Granted, those creating GIFs with software that had been licensed properly were unaffected, but the point remains — it can filter down to users. Never say never.

Reader Comments

I don’t honestly think these guys can win. The format was already in use before they got the patent, and I forget what the wording is exactly, but there is something in US patent law that one cannot patent an already present idea. So, for example, one cannot patent the concept of a chair and then sue everyone who makes and uses chairs.

And suing individual users? C’mon, that’s ridiculous. Maybe huge web design firms, but only if they win the first suit against the companies.

This weasel company’s claim will be squased in a year or two and no one will notice. Nature abhors a weasel.

And like SCO, they won’t win. Nor will they come after individuals, unless they want to sue every computer user in the world. They are aiming their lawyer cannons at the money targets — Adobe, Apple, et al.

Hooray for PNG. I have been using it almost exclusively in all designs, except where I need 1-bit transparency that just works.

Perhaps not, but the $90 million in licensing fees they’ve collected so far goes some way toward proving there’s something to their suit. Sony doesn’t hand out $16 million to just any company that comes along and asks for it.

This doesn’t hold much water. Forgent’s had the IP for 7+ years, and only recently started seeking licensing fees. They pretty much already shot themselves in the foot. However, it might bring about another, better, format.

If anything, this should be reason enough to make PNG the de facto standard image format in web sites and applications. And yeah, that includes IE, the one and only browser that is holding back a widespread use of PNG.

I don’t see what all the fuss is about. The patent was originally granted by USPTO on Oct. 6, 1987. As such, it expires October 6, 2004. Forgent is making a last extortionate push to get some cash out of litigation averse companies before the patent expires. They won’t have time to sue end users before October, and suing end users is silly because they have no money. :-)

At best, they could get a settlement for past infringement from the companies in the lawsuit, and such a settlement would preclude them form suing individual users for past infringement. If you also consider that they have not acted in a timely manner to defend their patent as required by US law, you can understand why all the companies in the lawsuit laughed at them.

This is a good example of why the USPTO needs to seriously reconsider this bizarre habit of allowing mathematical algortihms to be patented.

Congrats to Forgent’s public relations department, though. A single press release can do so much for the company profile … :-)

There is no point in discussing whether it is the 17 yr or 20 yr rule. If a court says their patent rights have been infringed, folks have to pay up. Yes, it doesn’t matter if the patent has lapsed.

Dave: Patent laws and licensing fees are the next realm in software. The discussion in my Adelaide LUG recently focussed on this. The driving force in software development still remains “what can be patented”, and as “broadly” as possible. This was the speaker’s own experience.

The goal of these patents remains dual: licensing, and protecting self from lawsuits.

Firstly IBM comes into mind. No other tech company has more patents granted each year than Big Blue. Some figures estimate that IBM reaps licensing fees to the tune of $1 billion US per annum on its patents!

Secondly, patents are used in a specific case when another firm is threatning to sue. So you just show them your patents they are infringing. Nice little agreement, case closed.

All of this was nice and good until the quite recent adventurism of these small players to hit the motherlode. Burst, SCO and now Forgent come to mind.

Legal costs will surely preclude end users from being sued. Forgent is just gaming the big names Apple, Adobe to cough up the cash. But surely this doesn’t mean they will not come after end users. if nothing else works for them, they will come. Its just the nature of the beast.

Yeah, Sunny. I belive I wrote “At best, they could get a settlement for past infringement from the companies in the lawsuit, and such a settlement would preclude them form suing individual users for past infringement.”

You could at least read my post in its entirety before dismissing me. Sheesh.

“They can’t go after the users” is a common refrain because it is legally correct. The Internet is full of commentators who don’t understand the difference between using and distributing.

Legally, copyrights and patents have no application to use, they apply to distribution. You buy something, you can use it, period. If a vendor didn’t dot all their i’s in selling you (or giving you) a product, that’s their problem, not yours.

Forgent can go after software companies implementing JPEG compression, because Forgent a patent. It’s stupid, but legally possible. However, the end user *by definition* is not writing infringing software, and thus the end user is not violating any patents. Simple, huh?

People who point to the RIAA as a litigator of end-users forget that this isn’t the case. The RIAA is only going after people who *distribute* music, not those who download or listen to music.

That’s why the SCO debacle is such a farce. Darl is trying to argue that they can go after end users because “all Linux end-users also distribute Linux” or something ridiculous to that effect. It would never stand up in court, and they know it, which is why they haven’t (and won’t) sue any end users for copyright infringement. Instead, they’re pursuing purely contract cases (like the Autozone case).

Bardas: I was making a general statement regarding this issue. Many may feel that since the patent lapses in couple of years, this is a non-issue. That is certainly not the case. I am sorry for not acknowledging your point. I apologize if my words have led you to believe otherwise. It was not my intention to dismiss you.

I will concur with Dave in saying that this is not at all laughable. This company has secured $90 million US in licensing including Sony. None of these companies fork out that sort of cash for nothing.

Like you, I find it unlikely that end users will be sued, but its not entirely implausible. As I said, it could be a last ditch effort.

Of course you are right about the need of reform in this process. I think USPTO should take heed from their British counterparts who are very lukewarm/apprehensive about software patents. I doubt if anything will change at all. Like I mentioned in my earlier comment, patents are just the way of doing business in today’s world.

The first rule of law is don’t sue folks with no money (if that is what you’re after, and it almost always is if you’re inclined to judicial contest). So, other factors aside, individuals are mostly safe by virtue of the fact that they don’t produce enough nectar to justify a run through the juicer.

“Right. So why did the RIAA sue individuals?”

Cuz it was cheap press…. but a risky move by a formerly cash-drunk-but-presently-less-so industry confused and desperate to do *something* in the face of a systemic technological/cultural shift. Different scenario entirely.

“So individuals are safe?”

Yeah. Sleep tight, Billy. Nobody is going to sue Grandpa for playing with the images off his new digital photo kamera.